FXStreet (Łódź) - The eFXnews team remark that in the opinion of Credit Agricole the scope for a drop in BoE rate expectations from the current levels is limited.

Key quotes

"Against expectations, according to the latest minutes two MPC members voted in favour of a rate hike at the August meeting."

"It must be noted that some central bank members regard the fall in the unemployment rate as a more important indicator of the degree of slack as compared to wage growth. Given firm business activity we expect further improving labour market conditions."

"This in turn suggests there is limited room of falling BoE rate expectations from the current levels."

"Considering that the past few week’s GBP correction was driven by falling investors’ central bank monetary policy expectations, there now appears limited scope of the currency depreciating further."

"Accordingly we stick to the view that the past few weeks’ downside was corrective rather than a change in trend. Hence we remain in favour of buying GBP dips, for instance against the JPY."

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